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Q3)The capital structure of Mohit ltd consists of ordinary share capital of 210,00,000 (shares of 100 each and 210,00,000 of 10% debentures). The selling
Q3)The capital structure of Mohit ltd consists of ordinary share capital of 210,00,000 (shares of 100 each and 210,00,000 of 10% debentures). The selling price is 10 per unit, variable cost amount of 26 per unit and fixed expenses amount to 2,00,000. The income tax rate is assumed to be 30%. The sales level is expected to increase from 1,00,000 units to 1,20,000 units You are required to calculate The percentage increase in earning per share The degree of financial leverage at 1,00,000 units and 1.20.000 units combined. The degree of financial leverage at 1,00,000 units and 1.20,000 units The degree of operating leverage at 1,00,000 units and 1.20.000 units ii) Comment on the behavior of operating and financial leverages in relation to increase production from 1,00,000 units to 1,20,000 units Explain
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